Watch out for mortgage protection insurance delays or insurance hold-ups
You have found the house of your dreams, secured the funds to buy it and had your offer accepted. Now it’s time to go legal.
The next step is to engage a solicitor to do the conveyancing, which is the legal work involved in transferring ownership of the property to you.
You should hire your own surveyor, engineer or architect to carry out a detailed structural survey, especially if you are buying an older property.
This will help highlight any issues you may not have been aware of when you made the offer.
For example, if your surveyor discovered that the entire roof needed to be replaced, you may decide not to buy.
Once the offer has been accepted by the vendor, subject to survey, the sale is agreed.
You will pay a booking deposit to the auctioneer.
Booking deposits can be as low as €3,000 but can be up to 3% of the purchase price.
The auctioneer prepares a document called a “Sales Note”, which details the names of the vendor, purchaser, the purchase price, the deposit paid, conditions of sale, and the names of the solicitor for the vendor and purchaser, and an estimated closing date, which is the date in which ownership of the property will transfer to you.
The vendor’s solicitor on receipt of the Sales Note will issue the contracts.
The Contracts are sent in duplicate, together with a copy of the Title Deeds, to your solicitor.
Once your bank has formally approved your loan in writing on the basis of the price of the house and the information furnished by you, a formal loan package will be issued.
Normally a Letter of Loan Offer, setting out the main details of the loan, is issued to you, and the loan pack comprising of mortgage documentation, acceptance of Letter of Loan Offer and assignment etc. is issued to your solicitor.
When your solicitor has checked the loan pack and discussed key terms with you, various documents are signed and completed to enable the bank to proceed.
At that time, your solicitor will also investigate title to the property and ensure that all documentation is correct and that ultimately you will have no trouble becoming the registered owner of the property and that your lender’s interest in the property is registered in the form of a “charge” over the property.
At this stage, you will sign the contract in duplicate and pay the contract deposit — 10% of the purchase price less the booking deposit already paid.
The vendor’s solicitor returns one copy of the Contract, together with the deposit, and this creates a binding agreement between all parties, subject to the terms and conditions contained in the Contract.
On exchange of contracts, your solicitor returns the Letter of Loan Offer and ancillary documents to your bank.
Your solicitor raises Requisitions on Title and these are sent to the vendor’s solicitor, together with a draft Purchase Deed.
The vendor’s solicitor replies in writing to requisitions received from your solicitor, and approves the deed.
Both solicitors then agree a final closing date before which you will have to pay the balance purchase monies.
The period between exchange of contracts and completion generally takes six weeks (although this can vary greatly) enabling you to put finance in place, and the vendor to move out.
There are pitfalls that can slow the process down.
To draw down your mortgage cheque, you must have mortgage protection insurance in place.
Securing this may take longer than you expect, particularly if you have had previous health issues.
Your lender will also demand you have home insurance in place.
A common cause of delays is that the life assurance or fire insurance has not been taken out in time.
Your solicitor will prepare a statement setting out the balance required to complete the purchase and costs.
This is sent to you in advance of the completion in order for you to deliver the balance of funds to your solicitor.
This takes into account any extras or allowances agreed by you and the vendor.
Assuming everything is in order, and the funds have been transferred to the Vendor, the keys are released by the auctioneer to you.
You should make arrangements to insure the property immediately.
Following signing by you of the Purchase Deed, your solicitor will proceed to stamp the Purchase Deed and then register same in the Land Registry.
Stamp Duty is 1% of the purchase price (on property with a value of up to €1m.).
Registration can take months, if not years, depending on the county and type of property involved.
This delay does not undermine the fact that you are the legal and beneficial owner of the property.
Indeed, you could sell a property even though registration has not been finalised in the Land Registry.
Finally, congratulations on your new home.
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